Two years ago, we published a blog post focused on the data trap—the concept that while millions of new users in emerging markets were getting online for the first time with affordable smartphones, the price of the mobile data needed to stay online was relatively expensive. Two years later, just as the markets have evolved so has the data trap, especially for mobile users in India. Does the data trap still apply?

As Android rises, prices drop

In 2017, smartphone prices are no longer the barrier they once were in emerging markets. In India, the majority of devices sold are considered affordable, with more than 70 brands priced lower than $100. As new users get online, device affordability is an expectation, which is driving up competition. The demand is even forcing Apple to slash the price of their iPhone 6 in India in half to remain competitive.

The catalyst for this change? Android diversification. Users demand high-quality, feature-rich devices at an affordable price point. Chinese brand Xiaomi has flourished since launching in India in July 2014, developing into the third-largest smartphone brand in India in 2017. Its Redmi 4 recently became the fastest-selling smartphone in India. Xiaomi’s success points to India’s demand for smartphone that don’t sacrifice quality for price.

Buying power is making mobile data cheaper

When we look at the cost of 500 MB of data, it seems that the data trap is alive and well in emerging markets. However, when we look at average minimum wage, it tells a different story. Incomes are rising in these markets, which makes mobile data slightly more affordable. Our assumption that the high price of data is turning people off from buying data at all, is not exactly the 2017 reality.


Mobile Data Costs in Four Emerging Markets


Indian consumers skipped the desktop generation, jumping directly to mobile phones as their primary internet connection. Indians use mobile devices to access the internet 80% of the time, compared to the average of 50% globally. Mobile data is necessary to get connected, regardless of the price. This demand has driven many operators to reduce data costs, but none more so than Reliance Jio.


Jio, a subsidiary of Reliance Industries, launched in India in September 2016. In an unprecedented move, Jio offered users free 4G mobile data. Within the first month, 16m people signed up for the service, faster than any other in the world. As of February this year, the operator has reached 100m users. This disruption has sparked a new data price war in India, forcing other mobile operators to take steps to compete. Idea Cellular and Vodafone India have announced that they are merging, creating India’s largest mobile phone operator. Airtel offered users up to 30 GB of free 4G data. Ultimately, users are benefiting and operators are suffering from reduced margins and competition.

Indian users still data conscious

Despite the data wars, smartphone users in India are still conscious about how much they spend on their data and how they use it. Based on our experiences traveling in-market, we’ve learned a lot about how users change their usage habits based on the price per MB. For example, many users we speak to have either more than one phone, multiple SIM cards in a multi-SIM device, share a device with the rest of their family, or some combination of all three. They do this all in effort to save money, such as using one SIM card for voice calls and another for data. We experienced this many times with Reliance Jio. Many users will have one SIM card from one operator for their voice calls, because that operator offers great deals on voice, then use a Jio SIM for free data.


It’s also quite common for users in India to turn off their cellular data when they’re away from home for a long time. This is also why WhatsApp is so ubiquitous in emerging markets like India—it’s a data-saving way to communicate. Less useful and data efficient apps are relegated to the home, when a wifi connection is available.

Not a data trap, but a data limitation

The data trap no longer blocks users from accessing the apps and content they need online like it did in 2015. 2017’s data trap is more of a data limitation. Users can access the content they need, but the price makes them think twice about how and where they access it. Whether that’s by using multiple SIM cards to get the smartest deal on data or waiting until they’re connected to wifi to use data-sucking apps like Snapchat, emerging market users in 2017 are smarter and more data-conscious than ever before. However, as the demand for mobile data outpaces the drop in data prices, the data trap could develop again.


Learn more about smartphone users and market trends in the latest update to the Jana Index.